Microsoft's video games system, X-Box, is trying to steal a lead on its competitor Sony PlayStation 2 by being internet-enabled.

The competition: Sony's PlayStation 2

Online gaming is already offered by Sega's Dreamcast, another one of X-Box's competitors, though production of this console will be halted by the end of this month.

Sony's PlayStation 2 has also been built with future networking and internet access in mind.

But Sony has said it will wait until broadband internet access is widely available before it equips its console with a modem.

Sony has predicted that a "broadband society" will arrive in 2005.

Japanese deal

In its internet gaming push, Microsoft has formed an alliance with the Japanese internet and telecoms company NTT Communications.

Together, the two companies will develop internet access via the X-Box, facilitate games distribution and other high-speed services, and make it possible for Japanese customers to play games over the net.

"The key part of the deal is enabling online gaming," according to the man in charge of Microsoft's new game platform, Robert Bach.

"We will have games in which thousands of people are playing against each other or playing with each other," he said.

"We believe this new service will contribute to the popularisation of broadband [in Japan]," said NTT Communications president Masanobu Suzuki.